What?
It is silly. In fact, it's stupid. Activision has the most to lose being the front most publisher in the industry right now. Why would Activision burn bridges with Sony if Sony hasn't "failed" per se? Thier console is still alive, and Activision is still making a profit on it.
As we've seen this generation, anything can happen. What position would Activision be in if Sony managed to somehow turn the tables next generation with a new Console that lit up sales charts? There is certainly an equal amount of risk involved abandoning a platform entirely, as well as supporting it.
It was just a stupid thing to say, point blank. There is no experience necessary, or knowledge of economics. It's very basic and easy to grasp. It was stupid.
Without being able to see their contractual agreements and profits noone other than Activision can say whether it's stupid or not.
When Activision ports a triple A title over to the PS3 are they required by Sony to produce X amount of boxed games? Are they then left with Y amount of unsold games sitting on the shelves?
For example for a projected blockbuster game, did they produce 1 million copies of the game, but then only sold 500k units? While the sales look good and the revenue look good. The profits, or this case loses, could certainly be devastating.
If PS3 consistently sells less than projected or less the number of copies they are required to produce, then they could be in fact making significantly less profit than what they are paying Sony for the priviledge of selling their game on the PS3.
They must pay Sony cash for each product either sold or produced. It's pure profit for Sony. Doesn't matter if X game sells 10 copies of millions of copies. For the publisher however. You MUST reach the break even point and then some for something to be profitable and not just profitable but worth the risk of sinking millions of dollars into a project. And that's not just dev costs if you want to claim that porting is cheap. You still have to pay duplication, licensing, etc...
And when coming up with the duplication costs you can't just calculate based of total units sold. You have to base it off total units produced which could be significantly more than units sold if the title undersold projections by a significant amounts.
[Edit] Let's use Skate 2 as an example. Last I saw sales on X360 were around 800k+ units while PS3 had 200k+ units sold in this US a few months ago. Lets assume they were expecting PS3 version to sell half as much as X360. Now lets say the produced 1 million units for X360 and 500k units for PS3. While X360 obviously paid for duplication costs and then some. The PS3 may not have even sold half the amount duplicated. Yet they still have to pay for all those unsold units.
And that's their main contention. They want Sony to reduce the price of the console in the hopes that it sells more thus allowing them a better chance to sell through the amount of pre-boxed titles they MUST produce whenever selling a game.
I'm sure most companies make the exact same demands of Sony in private. It's only Activision that's made it public in hopes of forcing Sony's hand.
And that's just ONE scenario where the PS3 might not be profitable for them, even when just porting a title.
As said, without being able to look at the actual profits made, number if copies they are required to produce, what costs are associated, etc. noone but Activision can say whether it's worth the investment.
And yes, I also acknowledge that all this could be a purely political move to bolster business negotiations with Sony. But again, without being privy to the important details...
You have to take what Activision says as what's best for them as a business, albeit with a grain of salt.
And you have to take what Sony says as what's best for them as a business, albeit with a grain of salt.
Noone get's a free pass from me.
Regards,
SB